Senator Casey Pushes Bill to Cut Taxes for Small Breweries

Small brewers across the U.S. will have reason to hoist their mugs if legislation giving them a tax cut passes.

Sen. Bob Casey (D-Pennsylvania) is pushing to pass the Small Brewer Reinvestment and Expanding Workforce Act, which would cut excise taxes for small breweries — those that produce fewer than 2 million barrels of beer per year.

Small breweries currently pay an excise tax of $7 per barrel for the first 60,000 barrels of beer they brew each year, and $18 per barrel above that.

The new bill would reduce the tax rate to $3.50 per barrel for the first 60,000 and $16 per barrel for up to 2 million barrels.

“Last year we did about 2,500 barrels, and if things go really well for us this year, we might crack the 4,000 barrel mark,” said Scott Smith, owner of East End Brewing Co. “So when we’re talking about that 60,000 barrel number, you can see that we can take what is out there and multiply it by 10 and still not get close to bumping into that ceiling.”

The legislation would also redefine a small brewery as one that produces fewer than 6 million barrels per year.

Casey said the tax has not changed since it was established in 1976.

“What this legislation is attempting to do is to really catch up to the beer market in a sense from where we were in the 1970s,” Casey said.

Casey said small breweries only encompass 5 percent of the domestic beer market. According to the Brewers Association, there are 2,483 small breweries in the United States.

Casey said two companies, Anheuser-Busch and MillerCoors, control the majority of the marketplace.

“We want to make sure that we don’t forget about and leave on the table opportunities to help that 5 percent of small brewers who are just looking for a little break, a little relief, a little certainty in a still difficult economy for a lot of folks,” Casey said.

A Harvard study of the legislation reported that 5,000 jobs would be created in the first 18 months, and $1 billion would be pumped into the economy over five years.

“This makes good sense for small brewers, it makes good sense for the economy of Pennsylvania, with a hundred of these across the state, and it also makes good sense from a national perspective when we’re constantly in need of ways to jumpstart the economy or at least a segment of the economy, this does that,” Casey said.

Correction: An earlier version of this story incorrectly reported the name of the East End Brewing Co. The story has been updated.